It cuts the chat at sea (7)
I believe the answer is:
hatchet
'it cuts' is the definition.
(something which can be used to cut things)
'the chat at sea' is the wordplay.
'at sea' is an anagram indicator.
'the'+'chat'='thechat'
'thechat' anagrammed gives 'HATCHET'.
(Other definitions for hatchet that I've seen before include "Short-handled axe" , "chopper" , "Tomahawk" , "Sort of job" , "Bury this to make friends again" .)